How to Increase User Retention: 6 Proven Strategies

You’ve shipped your product. Users are signing up. Early feature adoption looks good. But three months later, you look at your dashboard and half your signups from month one have churned. In short, you’ve got a retention problem.

Even if you’ve got a decent retention rate, it still makes sense to learn how to increase user retention. That’s because small lifts matter: a 5% increase in customer retention can boost profits by up to 95%.

In this guide, I’ll walk you through 6 proven retention strategies with practical examples you can implement. These are actionable tactics rooted in product management best practices. We’ll also cover the key metrics to track your customer retention rate.

Defining the user retention rate and its importance

Your user retention rate is the percentage of users who continue to use your product over a specified period. It’s the ultimate validator of product-market fit as it shows whether people actually stick around.

The counterargument often arises: “Shouldn’t we capture market share first and fix the bucket later?”

No. Here’s why that logic fails: acquiring a new customer costs 5 to 25 times as much as retaining an existing one.

Relying solely on acquisition extends your CAC payback period indefinitely, burning cash faster than you can raise it. On the other hand, repeat customers drive 65% of company revenue and spend 67% more per transaction than new buyers.

How to measure customer retention

To diagnose retention health effectively and formulate strategies to increase user retention, I focus on four key customer retention metrics. You can track all these through Userpilot’s analytics dashboards, which let you monitor trends without jumping between tools.

1. Customer retention rate (CRR)

This is your baseline pulse check. You need to know precisely what percentage of customers stay over a specific period. While elite targets sit higher, a 2025 analysis places the average B2B SaaS customer retention rate at 74%.

To calculate the customer retention rate, use this formula:

Customer retention rate = [(Number of customers at end of period – Number of new customers acquired during period) / Number of customers at start of period] × 100

I’d recommend that you monitor this metric monthly to spot trends before they become irreversible. Tracking over a longer period may only uncover issues when it’s too late.

2. Churn rate velocity

What is a good churn rate for SaaS? Benchmarks vary, but enterprise products must stay below 5% annually, while SMB tools should aim for 3-5% monthly. However, velocity is more important than static. Is the rate at which you’re losing customers accelerating? 

If your rate exceeds these thresholds, pause your ad spend(or any other user acquisition expenses) immediately. Data shows that SaaS companies with Net Revenue Retention below 60% have a median churn rate of 7%, roughly double that of high performers. It’s a Herculean task to out-sell a 7% monthly customer churn rate.

Here’s the formula to calculate churn rate:

Churn rate = (total number of customers lost during a specific period / Total number of customers at the start of the period) × 100

3. Lifetime value (LTV)

This metric dictates your budget. For example, if a customer’s LTV is $3,600, spending $50 on a proactive retention marketing strategy (like a concierge onboarding call or a specialized tool) is a high-ROI decision.

You cannot afford not to spend on retention if your customer lifetime value supports it. Understanding LTV helps you justify the engineering or product resources needed to implement the user engagement strategies we cover later in this guide.

There are several ways to calculate LTV in SaaS. However, this formula is one of the simplest:

Lifetime value = Average Revenue per Account / Customer churn rate

4. Cohort retention analysis

Aggregate numbers lie. Your overall churn might look low because of loyal customers from two years ago, while new users are leaving in droves. I use cohort retention analysis to segment existing users by signup date. This visualization is critical for identifying whether a specific product release or onboarding change negatively impacted a particular group of users.

For example:

• The scenario: If January’s cohort has 80% retention but June’s has 40%, I know recent changes to the onboarding process or a specific feature update broke the user journey.
• The fix: Compare the user paths of successful cohorts with those of struggling cohorts to identify where user behavior diverges. By analyzing these paths through our product analytics, you can see where the drop-off happens and intervene with targeted re-engagement.

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6 Proven customer retention strategies

Measuring retention tells you whether you’re keeping or losing active users. These six strategies show you how to retain more.

1. Drive activation with contextual onboarding

Most users leave because they never experience the product’s core value. Reducing time to value (TTV) by replacing generic product tours with contextual onboarding will help you address this issue.

Contextual onboarding shows the right message to the right user at the right time. Instead of a 15-step lecture that users skip, build an interactive walkthrough that teaches by doing.

For example, in an email marketing tool, skip the “Account Settings” tour on the first login. Use a native tooltip to highlight the “Create Campaign” button. Trigger the next guidance step only after they click it. This approach gets users to their first win in minutes, not days.

The action plan:

• Implement checklists: Leverage the “Zeigarnik Effect” by placing an onboarding checklist in your UI. Incomplete tasks create a psychological itch users want to scratch. Something like, “3 of 5 tasks complete,” to encourage customers to finish.

• Use dummy tasks: Include a pre-checked task (e.g., “Create Account – Checked”) to utilize the “Endowed Progress Effect.” Users complete a list faster if they see they’ve already made progress.
• Use interactive walkthroughs: Guide users step by step through key workflows using tooltips and modals that respond to their actions. Unlike static tours, interactive walkthroughs are more dynamic and personalized based on user input. Their interactiveness makes the process smooth and engaging.

Example of a contextual onboarding process: Talana

Talana, an HR management platform, faced a challenge. It was difficult to onboard users effectively and implement in-app communication for their product. They tried using Intercom, but it didn’t help because it didn’t support dynamic attributes for onboarding flows and was too expensive.

They switched to Userpilot to build contextual onboarding flows that guided users based on their specific role and goals. They also used Userpilot to enhance their self-service support through a resource center and monitor crucial metrics.

With this approach, Talana improved its user engagement. Over 30% of users interacted with their in-app messages and tooltips.

2. Create habits with strategic gamification

A common objection to gamification is that it feels “gimmicky” or unprofessional for B2B SaaS. This view misunderstands the psychology behind the strategy.

Gamification isn’t about turning software into a video game. It’s about leveraging behavioral psychology to create habit loops that keep customers engaged. SaaS gamification strategies leverage human desire for completion and reward to guide users through complex setup tasks.

The action plan:

• Celebrate milestones: When a user completes a significant task (e.g., sending their first campaign or closing their first deal), trigger visual celebrations like confetti or a success modal. This micro-dopamine hit associates your product with success.
• Visualize progress: Use progress bars throughout key workflows to leverage the “Endowed Progress Effect.” Seeing a bar at 20% motivates users to reach 100%.
• Award badges: Recognize tenure or expertise by highlighting “Power Users” or “Early Adopters” in your community or product interface. This creates social proof and a sense of belonging that build customer loyalty.

Analyze user paths to find drop-off points, then inject a gamified element (e.g., a “You’re halfway there!” tooltip) to bridge the gap. The key point is to make progress visible and reward momentum.

3. Personalize customer journeys via behavioral segmentation

Building a retention strategy for the average user satisfies no one. Product marketers have different needs than onboarding specialists, just as enterprise clients differ from freemium signups.

You might object that personalization is resource-intensive. However, modern tools allow you to move from generic role-based grouping to behavioral segmentation without a heavy engineering lift. This approach involves grouping users based on what they do (or fail to do) inside your app, rather than just who they are.

Using Userpilot’s segmentation capabilities, track specific in-app events to identify at-risk users. For instance, find users who signed up 14 days ago but haven’t used your key feature.

The action plan:

Set up a “Slipping Away” segment with these conditions:

• Signed up: More than 7 days ago
• Custom Event: Has NOT performed “Core Feature Clicked”
• Last Seen: Less than 2 days ago

Once defined, trigger a specific flow for this group. For example, a modal with a micro-video highlighting the feature’s benefits or a slideout tutorial. You can also send targeted push notifications with a direct link to the feature they’re missing.

Treat users based on their actual customer journey, not a theoretical one. Segment by customer behavior, then personalize the experience to meet them where they are.

Example of a personalization via segmentation: Cledara

Cledara, a SaaS management platform, couldn’t scale its high-touch onboarding model. Their internal tool only allowed geographical segmentation, forcing them to rely on generic emails that users ignored.

Their solution was behavioral segmentation through Userpilot. Instead of mass emails, they delivered targeted in-app messages based on specific user actions. They used our platform to create contextual flows that appeared exactly when relevant, reminding users about due diligence reviews or alerting them about unpaid fees.

For feature announcements, they segmented users by who would actually benefit from the update. Users could register interest in-app, and customer success managers followed up only with engaged users.

The results: Within one week, several dozen companies registered interest in a new feature through in-app messages. Such a response volume previously took two months via email. NPS survey response rates also increased because surveys reached actual users in context.

4. Close the customer feedback loop

Don’t treat feedback as a static report; treat it as a conversation. Annual surveys filed away in spreadsheets don’t prevent customer churn. To drive retention, implement microsurveys to collect context-specific insights exactly when user sentiment is formed.

Microsurveys appear in-app and ask a single question relevant to the user’s current activity:

• Trigger customer satisfaction (CSAT) loops: After a user interacts with a feature or closes a support ticket, ask, “How easy was that to use?” A “Hard” response identifies immediate friction points.

• Trigger NPS loops: Create NPS surveys to segment users into Detractors (at-risk) and Promoters (loyal). But don’t stop at the score. Add the follow-up question, “What’s the main reason for your score?”

The action plan:

The most critical step is closing the customer feedback loop. If a user leaves a low score, trigger an immediate follow-up asking, “What can we do better?” Route this directly to your product team, not into a feedback backlog that gets reviewed quarterly.

Once fixed, notify the user via email or in-app message: “You told us X was broken. We fixed it.” This single action converts detractors into promoters faster than any roadmap release. Why? Because you proved you actually listen and care about customer expectations.

Example of a customer feedback loop in an onboarding process: RecruitNow

RecruitNow, an applicant tracking system, faced unsustainable onboarding as its customer base grew to over 220 companies across Germany and Austria. Their face-to-face training consumed hundreds of hours monthly. Such an approach couldn’t scale without dramatically expanding their customer success team.

They used Userpilot to build in-app onboarding flows with video tutorials and walkthroughs. At the end of each flow, they triggered a simple survey asking users to rate their training experience. This feedback helped them continuously refine their onboarding and identify friction points early.

They also deployed CSAT surveys every six months to gather broader product improvement insights, asking users where the system could improve.

The results: RecruitNow reduced face-to-face training from hundreds of hours monthly to just four hours. More users completed training on day one and started using the product immediately, achieving high customer satisfaction scores within weeks.

5. Deflect support tickets with self-service resources

Friction kills momentum. You might assume your external help site is sufficient, but if a user hits a roadblock at midnight, they won’t switch tabs to search for answers: they’ll quit. Implementing an in-app resource center provides help right where the problem occurs, acting as an always-on support agent.

This hub allows users to:

• Search documentation without leaving the app.
• Watch microvideo tutorials (30-second clips explaining a feature).
• Access chat support or book a webinar if self-help fails.

For complex fields, use native tooltips to explain features on hover. By utilizing knowledge base integrations, you can pull existing docs from Zendesk, HubSpot, or Intercom directly into the app. This ensures content consistency without the headache of maintaining two separate databases.

6. Reactivate inactive users with value

Users drift away due to busyness, perceived low value, or unresolved friction. These dormant users are your lowest-cost acquisition channel because they already know who you are. They just need a compelling reason to return.

Define what “dormant” means for your product (e.g., no login for 14 days) and execute a win-back strategy using external triggers like email or push notifications. Track this through your retention metrics to measure how many users you’re successfully re-engaging.

Avoid generic “We miss you” emails. Instead, highlight the specific value added since they left. Did you launch a requested feature? Did you improve speed? Did you add an integration they needed? Give them a value-based reason to log back in.

The action plan:

Curate the “Welcome Back” experience. When a dormant user clicks your email, don’t drop them onto a confusing dashboard full of weeks’ worth of missed notifications. Use a welcome banner or modal saying, “Welcome back! Here’s what you missed.” Summarize the top 2-3 updates and provide a shortcut to the newest feature to re-engage users immediately.

Turn retention metrics into revenue growth

You’ve seen the strategies. You know the metrics. Now the question is: how fast can you implement them?

You don’t need a six-month engineering sprint to start retaining customers. With Userpilot, you can launch contextual onboarding, behavioral segmentation, feedback loops, and in-app resource centers without writing a single line of code.

Want to stop guessing why users churn and build a strong customer retention strategy that works? Book a demo to see how Userpilot helps you leverage these strategies to keep more users for longer.

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